Fingerprint payment has arrived
Fingerprint payment. It has been talked about. It took a long time. But it has arrived. A San Francisco start-up, Pay By Touch Solutions, announces today $130 million in fresh financing to roll out a way for you to use your fingerprint to pay for groceries and other goods and services.
Here is the Mercury News story (free registration) that ran today.
These guys were smart. They realized there was all this cash sloshing around at hedge funds. So they went out and tried their luck. The capital raised -- $55 million of it in convertible notes and $75 million in loans -- will help the company build out its finger-reading payment systems at several nationwide retailers, including in California in the first quarter of next year.
Update: VentureWire follows with a story (sub required), and includes this tidbit: Pay By Touch Chief Executive John Rogers said the company expects to file for an IPO within the next 18 months, is and already holding what Rogers calls "pre-meetings" with institutional investors.
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Fingerprint payment has arrived -- continued
Two months ago, we wrote about how fingerprint payment, long talked about, had finally arrived. San Francisco start-up, Pay By Touch Solutions, announced $130 million in financing as it planned to roll out a way for you to use your fingerprint to pay f...
December 16, 2005 9:11 AM
This is a hell of a lot smarter than using traditional venture capitalists. They had top tier management in place so they didn't need to rely on VC's for that benny, and they don't give up control which is, in large part, what VC's are in it for.
I agree...these guys are smart. It seems the writing is definitely on the wall for a liquidity event, such as an IPO. On a side note, didn't Burkle used to own Kohl's? Isn't Kohl's the number two retailer next to Walmart? Very smart.
The financing is certainly smart because this is quite a stinker. The user experience is quite a bit worse than a simple card swipe. The Merc notes the supposedly low transaction fee of 15 cents forgetting that this is ON TOP of the transaction fees for the underlying payment instrument! Biometric is totally unnecessary in card present transactions as the fraud rate is ridiculously low already. Anyone an pay a few retailers some cash to try out a new payment scheme.
Dumb, dumb, dumb.
I think the 15 cents includes the underlying payment instrument, because Pay By Touch folks told me they handle that. So you can see why they are entitled to the 15 cents. I don't want to become an advocate for this company, but what about the ease factor? Doesn't that count? I mean, you don't have to carry a wallet with you anymore (or face danger of losing it, dropping it, or if you are older, getting it stolen), because you've got your finger. True, won't be all pervasive in short-term, but what if they eventually pull it off?
What is really relevant is how few retailers are accepting this system. All are 3rd tier and neither has really committed their business.
This company is a great example of an outstanding sales job on investors with slim basis of business. If it brings up a recent memory in eRetail space that would be WebVan.
I think biometric may have a place in payment one day. But the tools are cheap and there is no reason for retailers to give up their brands to Pay-by-Touch.
This is just one step closer to having a number tatooed on our hand. I don't think this will go over in the christian segment our country. I would be concerned that too many people in the business world would have access to my finger print. The goverment already has our prints so why does business need it?
I agree with Maria.
Moreover, unlike other forms of authentication (password, certificate, smart card, token) the problem with biometric is that if your bio template falls into wrong hands you cannot revoke and replace it !!!
Department of Defense is on the cutting edge of trying to make it work and the term they use for compromised biometrics is "logical amputation".